Whalesbook
Leading brokerages Morgan Stanley and Goldman Sachs have released new ratings and price targets for several Indian stocks. IHCL sees an 'Overweight' rating with a Rs 811 target following its acquisition in the wellness segment. Tata Motors' target is cut to Rs 365 due to JLR's cyberattack impact, despite positive India PV outlook. Hero MotoCorp is upgraded to 'Overweight' with a Rs 6,471 target, citing market share stabilization and EV gains. Updates also cover Marico, Siemens, Inox Wind, Voltas, and Apollo Tyres.
Leading financial institutions Morgan Stanley and Goldman Sachs have updated their ratings and price targets for prominent Indian companies, offering crucial insights for investors looking at 2025.
Morgan Stanley maintains an 'Overweight' rating with a target price of Rs 811. The rationale is IHCL's strategic acquisition of 51% in Sparsh Infratech, owner of the Atmantan wellness resort. This move is seen as a strategic entry into the growing holistic wellness sector. The resort shows strong revenue growth (25% CAGR from FY19-FY25) and high EBITDA margins (50%). The investment of Rs 2.4 billion values the assets at Rs 4.2 billion EV, approximately 10x EV/EBITDA.
Goldman Sachs has reduced its target price for Tata Motors to Rs 365. The primary concern is a significant second-quarter miss, largely due to a cyberattack impacting Jaguar Land Rover (JLR). JLR reported a GBP -78 million EBITDA, far below expectations, with substantial production losses anticipated for Q2 and Q3. Global demand is also affected by tax hikes and tariffs. JLR has revised its FY26 guidance for EBIT margin (0-2%) and free cash flow (negative GBP 2.2–2.5 billion). However, Tata Motors' India passenger vehicle (PV) segment is expected to benefit from GST cuts, festive demand, and new launches, with industry growth near 10% in H2.
Morgan Stanley has upgraded Hero MotoCorp to 'Overweight' with a target price of Rs 6,471. The brokerage believes the company's market share decline has bottomed out, supported by performance in scooters, EVs, and premium bikes. GST-led price cuts are reviving entry-level demand, and festive volumes rose 17%. Margin expansion towards 15.3% by FY28 is anticipated due to an improved product mix and reduced EV segment losses. Valuations are considered attractive at 16.8x FY27 P/E. A key risk is the implementation of ABS norms in FY27.
Nuvama has also issued recommendations:
- Marico: Buy rating, target raised to Rs 865.
- Siemens: Hold rating, target unchanged at Rs 3,170.
- Inox Wind: Buy rating, target raised to Rs 200.
- Voltas: Reduce rating, target increased to Rs 1,200.
- Apollo Tyres: Buy rating, target lifted to Rs 600.
Impact
This news is highly relevant for investors holding or considering these stocks, directly influencing their investment decisions and portfolio performance. The updates reflect market sentiment, operational performance, and future growth prospects. (Rating: 8/10)
Difficult Terms:
- CAGR (Compound Annual Growth Rate): The average annual growth rate of an investment over a specified period longer than one year.
- EBITDA margin: Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company's operating performance.
- EV (Enterprise Value): A measure of a company's total value, often used as a more comprehensive alternative to market capitalization.
- EV/EBITDA: A valuation multiple used to compare the enterprise value of a company to its earnings before interest, taxes, depreciation, and amortization.
- GST (Goods and Services Tax): A consumption tax placed on a wide array of goods and services.
- P/E (Price-to-Earnings) ratio: A valuation ratio that compares a company's current share price to its earnings per share.
- Dividend yield: The ratio of a company's annual dividend per share to its market price per share, expressed as a percentage.
- ABS (Anti-lock Braking System) norms: Regulations requiring vehicles to be fitted with ABS, a safety system preventing wheels from locking up during braking.
